I was in Tehran a few months ago and stayed at the Espinas Hotel. The rooms were relatively new and comfortable. Of course don't expect Peninsula or Four Seasons standards, but I'd say the rooms are better than some of the 5 star hotels in New York that have not been refurbished.

I also stayed in Abassi hotel in Isfahan. One can still feel the grandeur of its glorious past. It has the potential to be a great hotel again if someone put serious money to refurbish the rooms.